Zuma’s Next Battle Is Voter Trust After Winning ANC Post

By Andres R. Martinez, Franz Wild and Mike Cohen -
Dec 19, 2012

South African President Jacob Zuma,
having scored a resounding win in ruling party elections, now
faces the tougher task of restoring voter trust amid mounting
discontent over poverty and unemployment.

Zuma, 70, fended off a challenge by his deputy Kgalema
Motlanthe for the top post at the African National Congress,
winning 75 percent of votes from delegates at a conference in
the central city of Bloemfontein. That will make him the ANC’s
presidential candidate in national elections scheduled for 2014.

“Jacob Zuma knows he’s got the conference in the bag,”
William Gumede, a political analyst at the University of the
Witwatersrand, said in a phone interview from Johannesburg. “He
doesn’t know if he’s got the country in the bag for 2014.”

The ANC has ruled South Africa’s largest economy since
taking power under Nelson Mandela in 1994, and commands almost
two-thirds of the seats in parliament. Zuma’s government has
struggled to contain a 26 percent jobless rate, rising protests
from poor shantytown residents against a lack of housing, water
and other services, and a wave of violent strikes since August.

Eighteen years after the end of apartheid, almost 1.9
million black households had no income at all, while white
households on average earn six times more than their black
counterparts, according to data from the national census. South
Africa had a record 113 township protests in the first seven
months of the year, according to Johannesburg-based research
group Municipal IQ.

Election Support

“Our strength has grown in numbers, but our influence has
declined,” Ben Turok, an ANC lawmaker since 1995, said in an
interview in Bloemfontein. “If you look at voting patterns,
it’s true.”

While the ANC dominates, its support dropped to 62 percent
in municipal elections in 2011 from 66 percent in the national
vote two years earlier. The opposition Democratic Alliance
boosted its share to 23.9 percent from 16.6 percent.

“We remain doubtful that Zuma can oversee the reforms
needed to pull the South African economy out of its current
rut,” Shilan Shah, Africa economist at Capital Economics Ltd.
in London, said in an e-mail. “This is unlikely to prevent
Zuma’s re-election as president in 2014, but a moribund economy
may weaken the ANC’s stranglehold over top-level politics in
South Africa beyond this.”

Investors’ perception of risk in South Africa has increased
this year. The cost of protecting South African government debt
against non-payment using credit default swaps over five years
has jumped 13 basis points since the start of mining strikes on
Aug. 10.

Ramaphosa Win

The rand has dropped 4.6 percent against the dollar during
the same period, the second-worst performer of the 16 major
currencies tracked by Bloomberg. The currency fell 0.4 percent
to 8.4788 per dollar by 3 p.m. in Johannesburg.

“Government services are exceedingly uneven,” Trevor Manuel, minister in the Presidency and head of the National
Planning Commission, told business executives and reporters in
Bloemfontein today. “You go into some government departments
where you feel like you’re in a modern economy, the service
feels good, the environment is good, the people are cheerful.
And then you go to other parts of government where you could be
living in Dickensian periods.”

Nationalize Mines

The election of Cyril Ramaphosa, the second-wealthiest
black South African according to the Johannesburg-based Sunday
Times, to the post of ANC deputy president yesterday may help to
bolster Zuma’s position and ease investor concerns. Ramaphosa
won 76 percent support in a three-way contest for the No. 2
party post.

“Ramaphosa’s re-entry into senior ANC politics will elicit
a sign of relief among investors, who view him as pragmatic and
business-minded,” Mark Rosenberg, an analyst at Eurasia Group
in New York, said in an e-mail. “He is also seen as a
counterweight to Zuma’s indecisiveness and reliance on
patronage-based politics.”

Ramaphosa served as ANC secretary-general and helped
negotiate the end of white segregationist rule before quitting
politics for business in 1996. He owns a stake in mines operated
by Lonmin Plc (LMI), the world’s third-biggest platinum producer, a
coal-mining venture with Glencore International Plc (GLEN), and has the
McDonald’s Corp. (MCD) franchise in South Africa.

The new ANC leadership will be faced with calls from the
ANC Youth League to nationalize mines and a push from members to
do more to combat unemployment and poverty. While Zuma secured a
resounding victory over Motlanthe, he will still need to win
over his detractors in the party.

“One of the things the ANC has a great capacity for is
self-correction,” Jessie Duarte, who was elected the deputy
secretary general unopposed said yesterday. “With the elections
ahead of us in 2014, our members will unite.”